Georgia-Pacific Takes RCC II Expansion

PORTLAND-Georgia-Pacific has pre-leased the 204,550-sf expansion of the 402,450-sf building it leases at Rivergate Corporate Center, a three-building, 1.1-million-sf complex developed and managed by Trammell Crow Co. on behalf of Multi-Employer Property Trust, a $3-billion collective investment fund whose primary beneficiaries are union pension funds. TCC’s Dave Ellis tells GlobeSt.com that Atlanta-based G-P leased the expansion space for just over nine years and extended its original lease for the rest of the building to match. The parties involved in the transaction did not comment on the negotiated lease rate. Last year, when G-P pre-leased the original 402,450-sf building, local industry experts told GlobeSt.com that the size of the company’s commitment and its creditworthiness warranted a lease rate substantially below the standard rate for newer industrial space in the area, which is $0.32-$0.33 per sf per month. However, Ellis tells GlobeSt.com there was interest from other parties in the expansion space, which may mean G-P had to pay more than it did the first time around to seal the deal.The building G-P is leasing is RCC II, which sits on 27.6 acres at the northwest corner of North Ramsey and Lombard. The development cost of the RCC II expansion is $7.7 million, which will bring the total development cost of RCC II to $22.5 million. RCC I, a neighboring 23-acre development, comprises two buildings totaling 488,125 sf. RCC I is currently more than half vacant.Represented by Seattle-based Kennedy Associates Real Estate Counsel, MEPT inked a $4-million, 55-year ground lease with the Port of Portland for the RCC I property in December 2001. In October 2002, with Georgia-Pacific in its pocket, MEPT signed a $5.4-million, 55-year lease for the RCC II land. The RCC II expansion is slated for completion by year’s end.Dave Ellis and John Fettig of Trammell Crow Co. handled the lease negotiations on behalf of MEPT. Gary Randles of Cushman & Wakefield represented G-P. TCC senior vice president Dirk Otis will oversee the development.G-P uses its RCC II space to house the warehouse and distribution operations of its Fort James Corp. subsidiary. The international consumer products company consolidated into the space from 500,000 sf in two Rivergate buildings owned by Rreef.